& cplSiteName &

Lucent Ditches Chromatis

Light Reading
News Analysis
Light Reading
8/28/2001
50%
50%

Lucent Technologies Inc. (NYSE: LU) has confirmed the closure of Chromatis Networks, the wavelength-division multiplexing startup it purchased in May 2000 for $4.5 billion (see Lucent Catches Chromatis).

The closure involves the layoff of about 150 employees, Lucent says. Most of these are R&D folk located at Chromatis's former headquarters in Petah Tikva, Israel, but a handful of engineers also have been let go at Lucent facilities in Herndon, Va. The company hasn't said whether any closure of buildings or offices will accompany the layoffs.

Lucent plans to discontinue its line of Metropolis MSX gear, which came from Chromatis. The company's other DWDM and next-generation Sonet platforms will continue to be sold under the Metropolis brand.

"This is part of our Phase II restructuring effort. We're resetting our priorities and making difficult decisions in order to focus our efforts on our largest service-provider customers," says Lucent spokesman Frank Briamonte.

The world's largest carriers are still buying telecom products despite the slowdown, but they weren't buying the Chromatis products, Briamonte says.

The news has been greeted by investors as yet another step in the right direction for Lucent, which in the past few weeks has managed to rework its credit agreements, launch a successful bond offer, and garner cautiously positive ratings from influential analysts (see Levy's Lucent Call Boosts Stock, Lucent Boosted by Bond Offering, and Lucent Breaks Through on Covenants). As this went to press, Lucent's shares were trading at $7.48, up 0.15 (2.05%).

Today's news is no surprise to anyone familiar with the long, sad saga of the Lucent/Chromatis relationship. Indeed, the deal has become a textbook example of how mergers and acquisitions were misguided and mismanaged under the executive team led by ousted CEO Rich McGinn.

A variety of sources say Lucent's biggest misstep wasn't buying Chromatis, which already had a metro WDM product ready to hand. The trouble arose when Lucent tried to integrate the box with in-house gear -- and with another recently acquired metro box from Ignitus Communications LLC (see Lucent Ignites ATM).

Months later, the integration effort had yielded little more than questions, arguments, and even lawsuits (see Tales of Lucent: Readers Respond and Lucent, Chromatis & Ignitus: A True Tale?). After awhile, Lucent quietly put the brakes on the Ignitus effort and seemed intent on making a go of the Chromatis wares.

But to little avail. Lucent had already lost significant ground in the metro market, and by early 2001 Lucent folded its Metropolitan Optical Networking unit back into the overall Optical Networking division. Bob Barron, the former CEO of Chromatis, left Lucent in April (see Lucent Metro Boss Leaves) and appears to be heading into a new job soon (see LightCross Taps Former Chromatis CEO).

Other Chromatis veterans say they have no regrets. "It is a very unfortunate situation, but the bottom line is that I understand Lucent's decision from a business perspective," says Doug Green, former VP of marketing at Chromatis and presently VP of marketing at Ocular Networks Inc. "Lucent is trying to restructure to be more efficient, and they had in Chromatis a standalone, single product laboratory in Israel."

He says one could argue a lot of reasons why the Chromatis product never took off, including the many Lucent reorganizations that took place during the product's tenure, as well as Chromatis's dependency on multiple technologies: "The market is moving away from 'god boxes' and the Chromatis product certainly depended a lot on the value of integrating DWDM, ATM, and TDM."

Lucent says it's holding onto the intellectual property it acquired with Chromatis and has no plans to sell it at this point.

— Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com

(45)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 5   >   >>
Dr. Joe
50%
50%
Dr. Joe,
User Rank: Light Beer
12/5/2012 | 12:13:34 AM
re: Lucent Ditches Chromatis
Dear Mike:

Neptec should be investigated by the Attorney General's Offices of Texas, New York, California, and Tennesse concerning thier unfair business pratices and theft of trade secrets.

This company can not be trusted and when will the customers, suppliers, and investment firms wake up to these type of behaviors.

They are the Enrons of the Fiber Optic Market.

The Carmack
50%
50%
The Carmack,
User Rank: Light Beer
12/4/2012 | 7:54:13 PM
re: Lucent Ditches Chromatis
Today's news is no surprise to anyone familiar with the long, sad saga of the Lucent/Chromatis relationship. Indeed, the deal has become a textbook example of how mergers and acquisitions were misguided and mismanaged under the executive team led by ousted CEO Rich McGinn.

OUCH!!!
lmtis
50%
50%
lmtis,
User Rank: Light Beer
12/4/2012 | 7:54:12 PM
re: Lucent Ditches Chromatis
Spend $4.75B, can your competing product lines, and then can Chromatis. My LU stock isn't looking like a very good deal is it?
Twistall
50%
50%
Twistall,
User Rank: Light Beer
12/4/2012 | 7:54:11 PM
re: Lucent Ditches Chromatis
A variety of sources say Lucent's biggest misstep wasn't buying Chromatis, which already had a metro WDM product ready to hand. The trouble arose when Lucent tried to integrate the box with in-house gear

If by "ready to hand" one means "designed without manufacturing in mind" and "will run given a large staff of software engineers standing by to patch over the hiccups" then the article is correct.

And as far as integration with in-house gear goes, I don't think they ever got that far.

Bottom line: Lucent bought Chromatis thinking it had a product ready for customer trials, and apparently, it wasn't.
stuartb
50%
50%
stuartb,
User Rank: Light Beer
12/4/2012 | 7:54:09 PM
re: Lucent Ditches Chromatis
Doug Green from seems to be shooting himself in the foot with his quote:

"The market is moving away from 'god boxes' and the Chromatis product certainly depended a lot on the value of integrating DWDM, ATM, and TDM."

It looks to me as if the Ocular product is attempting to integrate DWDM, ATM, TDM and IP...a Zeus to Chromatis' Apollo.

-Stu
ivehadit
50%
50%
ivehadit,
User Rank: Light Beer
12/4/2012 | 7:54:08 PM
re: Lucent Ditches Chromatis
i forgot to add: an excellently researched article. it had its facts right.
ivehadit
50%
50%
ivehadit,
User Rank: Light Beer
12/4/2012 | 7:54:08 PM
re: Lucent Ditches Chromatis
integrating atm, tdm, and dwdm. that says cost, cost, cost.

there's no atm in metro, no god-box dwdm requirement. seems like the wrong product for the times.

johnjohn
50%
50%
johnjohn,
User Rank: Light Beer
12/4/2012 | 7:54:05 PM
re: Lucent Ditches Chromatis
as a result of the mishandling of this acquisition, lucent lost some much needed infusion of entreprenuerial spirit that barron brought to the table. combine that with the fact that jeong kim is gone and lucent is becoming stale at the top ranks
tiredofit
50%
50%
tiredofit,
User Rank: Light Beer
12/4/2012 | 7:54:05 PM
re: Lucent Ditches Chromatis
My LU stock isn't looking like a very good deal is it?

And it hasn't for about a year. You just wake up Rip Van Winkle?
donethat
50%
50%
donethat,
User Rank: Light Beer
12/4/2012 | 7:54:03 PM
re: Lucent Ditches Chromatis
..Of the $5B acquisition, I really have to wonder how much Lucent thinks the IP is worth?? Is the value knowing what doesn't work??
Page 1 / 5   >   >>
From The Founder
Download our complete guide to de-risking NFV deployment in 2016, including:
  • An eight-step strategy to deploying NFV safely, based on input from the companies that have already started virtualizing their production networks.
  • Interviews with leading executives at Colt, AT&T, Deutsche Telekom, Cisco, Nokia, ZTE, Ericsson and Heavy Reading.
  • Flash Poll
    Live Streaming Video
    Prepping for the Future: Upskill U Explained
    During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
    LRTV Huawei Video Resource Center
    Digital Operation Transformation Roundtable Wrap-Up

    5|6|16   |     |   (0) comments


    Industry leaders at the Digital Operation Transformation Summit give their final thoughts at the roundtable.
    LRTV Huawei Video Resource Center
    Peter Sany on Digital Transformation

    5|6|16   |     |   (0) comments


    Peter Sany gives his view on digital transformation at the DOT Summit in Barcelona.
    LRTV Huawei Video Resource Center
    James McQuivey on Digital Transformation

    5|6|16   |     |   (0) comments


    James McQuivey gives his view on digital transformation at the DOT Summit in Barcelona.
    LRTV Interviews
    Courting the Apartment Crowd

    5|6|16   |     |   (0) comments


    In this LRTV interview, AT&T's Adrian Cardwell details the changing dynamics of the MDU markets and explains how AT&T is pursuing apartment dwellers with GigaPower.
    LRTV Interviews
    Demand Surges for On-Demand Ads

    5|5|16   |     |   (0) comments


    Ed Knudson, VP, Product and Strategy at Canoe Ventures, discusses the rising appeal of VoD ads and the challenges on inserting ads dynamically in live TV programming.
    LRTV Custom TV
    Exclusive: Video Interview With Sckipio CEO David Baum

    5|5|16   |     |   (0) comments


    At his headquarters in Tel Aviv, G.fast visionary David Baum, CEO of Sckipio, provided an exclusive interview to Light Reading and showed how innovations in rate and reach, vector densities, fast reconnecting times and SFP-based residential gateways are expanding the potential of G.fast.
    Telecom Innovators Video Showcase
    Atrinet's NetACE – Migration to NFV & SDN With NetOps-Driven LSO

    5|4|16   |     |   (0) comments


    At Atrinet's headquarters, Ray Le Maistre sits down with Roy Silon to get an in-depth look into the company's focus and the secret recipe for their success.
    LRTV Huawei Video Resource Center
    Amsterdam ArenA, Powered by Huawei

    5|4|16   |     |   (0) comments


    Huawei's ICT solutions power the state-of-the-art Amsterdam ArenA, turning it into a smart stadium.
    LRTV Interviews
    Testing When There's No 'There' There

    5|4|16   |     |   (1) comment


    The benefits of SDN/NFV are well known, but the transition comes with some challenges, prominent among them is: how do you test a network that has been abstracted and has the potential to be endlessly reconfigurable? Light Reading was at NFV World Congress in Santa Clara, Calif., where we bumped into Mats Nordlund, CEO and co-founder of Netrounds, a Swedish ...
    LRTV Interviews
    Ditching the Slash & the Orchestration Wars

    5|3|16   |     |   (2) comments


    SDN and NFV have been inextricably bound with each other for so long that on a conceptual level, smooshing them together into one catch-all phrase – SDNFV – is now justifiable, according to Dan Pitt, executive director of the Open Networking Foundation (ONF). Light Reading spoke to Pitt at the NFV World Congress, where he explained that the next ...
    LRTV Custom TV
    ZTE TV Connect Highlights

    5|3|16   |     |   (0) comments


    ZTE gives us a tour of its booth and new products at TV Connect in London.
    LRTV Custom TV
    Deluxe's Unified Delivery Solution

    5|3|16   |     |   (0) comments


    Join Alan Breznick of Light Reading and visit the Deluxe booth at NAB! Here you'll find Deluxe's Unified Delivery Solution, OTT video, virtual reality, HDR, 4K and much more!
    Upcoming Live Events
    May 23, 2016, Austin, TX
    May 23, 2016, Austin Convention Center
    May 24-25, 2016, Austin Convention Center, Austin, TX
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    Sprint CEO: Our Spectrum Is for 5G
    Dan Jones, Mobile Editor, 5/3/2016
    Amazon & Other 'Big 4' Cloud Providers Crushing Competitors
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/29/2016
    Showdown at the OpenStack Corral
    Carol Wilson, Editor-at-large, 5/3/2016
    Upskill U Kicks Off IoT Lectures With Ericsson
    Kelsey Kusterer Ziser, Editor, 5/4/2016
    Nokia's Motley: Confidence Paves Career Paths
    Sarah Thomas, Director, Women in Comms, 5/2/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Sloth Mail Click Here
    Sloth mail -- somehow even slower than snail mail.
    Live Digital Audio

    Of all the tech companies in the Valley, Intel has made the most aggressive commitment to building a diverse and inclusive workplace culture. It's doing so by taking concrete, measurable steps, making a large financial investment and through a commitment to complete transparency about its progress. In this radio show, WiC Director Sarah Thomas will be joined by Shlomit Weiss, Intel's Vice President, Data Center Group, and General Manager of Networking Engineering, who will share with us why Intel is tackling this huge challenge, how and to what effect. She will also discuss her unique experiences leading development of Client SOC development in the past and today leading development of all of the chipmaker's silicon hardware for networking IPs and discrete devices and managing a team of 600 engineers across Israel, Europe and the US.